Television broadcasting

After stellar growth in 2003, revenues for television broadcasters increased at less than half the pace in 2004.

Television broadcasting operating revenues increased 4.1% to $5.4 billion in 2004 compared with an 8.8% advance the previous year.

Two of three main revenue streams of the industry continued to rise. Air time sales rose 4.8% to $3.0 billion and subscriber revenues increased 5.9% to $1.3 billion. In comparison, air time sales jumped 8.7% in 2003 while subscriber revenues rose 6.9%.

Grants fell 2.0% to $0.8 billion last year following a 10.1% surge in 2003.

The slower growth in 2004 was spread across all segments of television broadcasting, but private conventional television had the slowest growth, edging up 0.9% to $2.1 billion. The competition within and across media for advertising dollars was felt most in this segment of the industry.

Meanwhile, pay-tv and specialty television broadcasters experienced another year of strong growth (+9.0%) in revenues, which surpassed $2.0 billion for the first time. The 16.7% surge in air time sales to $707.2 million easily outpaced the 5.9% increase in subscriber revenues.

As in previous years, the specialty segment took a larger piece of a slightly larger advertising revenue pie. Its share of the television advertising market was 23.8% in 2004, up from 21.4% in 2003 and only 6.1% in 1994.

The slower growth in revenue did not adversely change the profitability of private broadcasters. The profit margin (before interest and taxes) increased to 15.6% in 2004, up from 14.7% in 2003 and 10.3% in 2002.

The results for the industry as a whole, however, hid considerably different realities for its main segments.

The profit margin of the specialty segment improved to 19.7% in 2004 from 12.6% in 2003. At the same time, the profit margin of the conventional television segment fell to 11.0% from 14.3%.

The pay television segment remained the most profitable of the industry in 2004. For every dollar of revenue, pay television operators earned almost 24 cents of operating profit, slightly less than the 26 cents earned in 2003.

The operating profits (before interest and taxes) of private television broadcasters surpassed $650 million for the first time in 2004. For every $1,000 in profit, some $643 was generated by pay and specialty television operators, another milestone.

The digital channels, the newest members of the industry, continued to carve a niche for themselves. The average number of subscribers per channel was just over 500,000 at the end of August 2004, up 6.9% from 2003. However, it remained a fraction of the average of 4.5 million for analog channels.

The subscriber revenues of digital channels surpassed $100 million in 2004, more than twice the amount generated in 2002. Advertising revenues are also leaping ahead. From a very modest $6.7 million in 2002, sale of air time jumped to $13.5 million in 2004.

Despite the rapid rise, the digital television segment cornered a mere 0.5% of television advertising revenues last year.

Available on CANSIM: table 357-0001.

Definitions, data sources and methods: survey number 2724.

The 2004 issue of the Broadcasting and Telecommunications Bulletin, Vol. 35, no. 2 (56-001-XIE, $11/$35) will soon be available.

For more information, or to enquire about the concepts, methods or data quality of this release, contact Daniel April (613-951-3177; daniel.april@statcan.gc.ca) or Dany Gravel (613-951-0390; dany.gravel@statcan.gc.ca), Science, Innovation and Electronic Information Division.